Monday 03 August 2015 by FIIG Research Company updates

Company updates on Cash Converters, Dicker Data, Emeco, G8, Suncorp and Swiss Re

In case you missed the company news we have published this week, here is a summary. Full articles can be found at the bottom of this page

Cash Converters

On Thursday last week, Maurice Blackburn launched another class action against Cash Converters (CCV). The class action will seek refunds of all brokerage fees paid by an estimated 30,000 Queensland borrowers from 30 July 2009 until 30 June 2013 – an amount estimated at “up to $30m”.

Maurice Blackburn said the case was in response to enquiries from Queensland customers of Cash Converters, after it settled another class action against the company in NSW for $23m in June.  Settlement in that case was reached without any admission of wrongdoing or liability by CCV and was against a lending system only used in that state – meaning CCV will not face litigation on that matter in other states.

CCV responded stating it is going to “vigorously defend” the action and is of the view it “has no prospect of success”.

For more detail please see the related article below “Class action launched against Cash Converters”.

Dicker Data

As highlighted originally in the initiation research, Dicker Data planned to complete an equity raising in the second half of the year to increase the free float in the company and improve its leverage.  Dicker has now completed this action and has raised a total of $45.5m issuing 23m in new shares while the company founders sold down 6m shares ($10.5m).

For full details please see the related article below “Dicker Data completes $45.5m equity raising”.


Last week, Emeco released its 4Q operational update to the ASX.

Without specific information of EBITDA or margins it is difficult to assess whether Emeco will meet the FY15 guidance of EBITDA of $50-60m but we think the risk is to the downside i.e. that Emeco will miss or be at the low end of its EBITDA $50-60m guidance. However, it does appear that utilisation and revenue numbers are now relatively stable and that the outlook for margins is improving, which should see EBITDA continue to improve from a very low base.

Following the operational update, Moody’s downgraded Emeco and its senior secured USD bonds from B3 to Caa1 and retained the negative outlook, reflecting the high risk nature of the company and its bonds.

For more detail please see the related article below “Emeco's fourth quarter operational update”. It is important to read the 4Q update in the context of the last review we completed following the 3Q update which is also attached (titled “Emeco update on third quarter performance” – also in related articles below).

G8 Education

G8 Education has increased its bid for Affinity Education from $0.70 to $0.80 per share and is now also offering investors the option to take the offer in cash.  The change from a scrip only offer (swapping investors’ Affinity shares for G8’s) to a scrip or cash offer is credit negative given debt has been drawn to support the offer. 

For more detail please see the related article below “G8 Education ups bid for Affinity.”


On 4 August Suncorp released their full year results to 30 June 2015 (FY15) with a net profit after tax of $1,133m, in line with market estimates. Generally the results were good for debt holders but we note that Suncorp continues to return excess capital to shareholders via special dividends, thus reducing the capital buffer below debt. We continue to expect Suncorp to call their subordinated debt securities at first opportunity and consider their bonds ‘fair value’ at current levels.

For more detail please see the related article below “Suncorp's full year 2015 results.”

Swiss Re

On 30 July, Swiss Re released its 1H15 results.

The release saw another good set of results, with net income up 11% to USD 2.3bn for the half (versus USD 2.0bn in 1H14) on the back of a prolonged period of benign natural catastrophe events and solid investment earnings.

Highlights were as follows:

  • Group half-year net income increased 11% to USD 2.3bn; supported by solid underwriting and strong investment results
  • Property & Casualty Reinsurance net income of USD 1.3bn; combined ratio of 88.7% reflects disciplined underwriting and benign natural catastrophe losses
  • Life & Health Reinsurance net income of USD 495m
  • Corporate Solutions net income of USD 239m
  • Admin Re increased net income of USD 249m; USD 139m gross cash generation
  • July renewals show volume growth at attractive price quality driven by tailored and large transactions

 For more information view the press release External link - opens in a new window or contact your FIIG Representative.


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